QUARTERLY
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the quarterly period ended March 31, 2018

OR

[ ]

TRANSITION
REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For
the transition period from ______________ to _______________

Commission
File Number: 000-55726

THE
CRYPTO COMPANY

(Exact
name of registrant as specified in its charter)

Nevada

46-4212105

(State
or other jurisdiction

(I.R.S.
Employer

of
incorporation or organization)

Identification
No.)

23805
Stuart Ranch Road, Suite 235

Malibu,
California 90265

(Address
of principal executive offices)

(Zip
Code)

(424)
228-9955

(Registrant’s
telephone number, including area code)

Indicate
by check mark whether the registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Securities Exchange
Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports),
and (2) has been subject to such filing requirements for the past 90 days. Yes [ ] No [X]

Indicate
by check mark whether the registrant has submitted electronically and posted on its corporate Web site, if any, every Interactive
Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the
preceding 12 months (or for such shorter period than the registrant was required to submit and post such files). Yes [X] No [ ]

Indicate
by check mark whether the registrant is a large accelerated filer, an accelerated filer, or a non-accelerated filer. See definition
of “accelerated filer,” and “large accelerated filer” and “smaller reporting company” in Rule
12b-2 of the Exchange Act. (Check one):

Large
accelerated filer [ ]

Accelerated
filer [ ]

Non-accelerated
filer [ ]

Smaller
reporting company [X]

(Do
not check if a smaller reporting company)

Emerging
growth company [ ]

If
an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. [ ]

Indicate
by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes [ ] No [X]

As
of May 21, 2018 the issuer had 21,156,795 shares of common stock, par value $0.001 per share, outstanding.

This
Quarterly Report on Form 10-Q (the “Quarterly Report”) contains forward-looking statements. All statements contained
in this Quarterly Report other than statements of historical fact, including statements regarding our future results of operations
and financial position, our business strategy and plans, and our objectives for future operations, are forward-looking statements.
The words “believe,” “may,” “will,” “estimate,” “continue,” “anticipate,”
“intend,” “expect,” and similar expressions are intended to identify forward-looking statements. We have
based these forward-looking statements largely on our current expectations and projections about future events and trends that
we believe may affect our financial condition, results of operations, business strategy, short-term and long-term business operations
and objectives, and financial needs. These forward-looking statements are subject to a number of risks, uncertainties and assumptions,
including those described in Part I, Item 1A. “Risk Factors” in our Annual Report on Form 10-K for the period from
March 9, 2017 (“Inception”), through December 31, 2017, filed with the Securities and Exchange Commission on April
2, 2018. Moreover, we operate in a very competitive and rapidly changing environment. New risks emerge from time to time. It is
not possible for our management to predict all risks, nor can we assess the impact of all factors on our business or the extent
to which any factor, or combination of factors, may cause actual results to differ materially from those contained in any forward-looking
statements we may make. In light of these risks, uncertainties and assumptions, the future events and trends discussed in this
Quarterly Report may not occur and actual results could differ materially and adversely from those anticipated or implied in the
forward-looking statements.

We
undertake no obligation to revise or publicly release the results of any revision to these forward-looking statements, except
as required by law. Given these risks and uncertainties, readers are cautioned not to place undue reliance on such forward-looking
statements.

The
accompanying notes are an integral part of these condensed consolidated financial statements.

5

THE
CRYPTO COMPANY

CONDENSED
CONSOLIDATED STATEMENTS OF CASH FLOWS

For
the Period

from
Inception

For
the Three

March
09, 2017

Months
Ended

through

March
31, 2018

March
31, 2017

(Unaudited)

(Unaudited)

CASH
FLOWS FROM OPERATING ACTIVITIES

Net
loss

$

(3,521,747

)

$

(660,016

)

Adjustments
to reconcile net loss to net cash used by operating activities:

Net
change in unrealized depreciation on investment in cryptocurrency

2,905,557

-

Net
realized gain on investment in cryptocurrency

(1,072,598

)

-

Customer
payments received in cryptocurrency

(544,340

)

Depreciation

17,101

-

Share-based
compensation

(708,139

)

580,000

Changes
in operating assets and liabilities:

Accounts
receivable

62,954

-

Prepaid
expenses

(71,581

)

-

Accounts
payable and accrued liabilities

44,662

80,000

Income
tax payable

5,526

-

Contract
liabilities

850,951

-

Net
cash used by operating activities

(2,031,654

)

(16

)

CASH
FLOWS FROM INVESTING ACTIVITIES

Cash
paid in acquisition of CoinTracking, net of cash acquired of $1,547,097

(3,189,303

)

-

Purchases
of other asset

(23,843

)

-

Purchases
of equipment

(32,612

)

-

Net
cash used by investing activities

(3,245,758

)

-

CASH
FLOWS FROM FINANCING ACTIVITIES

Proceeds
from common stock issuance

-

400,000

Proceeds
from exercised stock options

70

-

Net
cash provided by financing activities

70

400,000

EFFECT
OF FOREIGN EXCHANGE RATE CHANGES ON CASH

5,828

-

NET
CHANGE IN TOTAL CASH AND CASH EQUIVALENTS

(5,271,514

)

399,984

CASH
AND CASH EQUIVALENTS, beginning of period

8,950,244

-

CASH
AND CASH EQUIVALENTS, end of period

$

3,678,730

$

399,984

SUPPLEMENTAL
DISCLOSURE OF CASH FLOW INFORMATION

Cash
paid for interest

$

564

$

-

Noncash
investment activities:

Shares
of common stock issued in exchange for investments in cryptocurrency

$

-

$

100,000

Issues
of common stock for acquisition of CoinTracking

$

4,736,400

$

-

The
accompanying notes are an integral part of these condensed consolidated financial statements.

6

THE
CRYPTO COMPANY

NOTES
TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS

NOTE
1 - THE COMPANY

The
Crypto Company (the “Company”, “Crypto”, “we”, “us” or “our”) was
incorporated in the State of Nevada on March 9, 2017 (“Inception”), and is engaged in the business of building technological
infrastructure, a proprietary investment portfolio and strategic alliances to facilitate the exchange of value in the digital
asset market and, specifically, to assist third parties with investing in, trading and managing digital assets. We also invest
in technologies and tokens in a manner that diversifies exposure to the growing class of digital assets. From time to time, we
may seek strategic acquisitions either by integrating third party teams and technology with our core business or by funding third
party teams in which we may have interest.

On
January 26, 2018, CoinTracking, LLC (“CoinTracking”), a Nevada limited liability company and wholly owned subsidiary
of The Crypto Company, acquired 50.1% of CoinTracking GmbH, and the remaining 49.9% of CoinTracking GmbH is owned by Kachel Holding
GmbH, a private limited liability company (Gesellschaft mit beschränkter Haftung) organized under the laws of the Federal
Republic of Germany. CoinTracking, GmbH, was incorporated in December 2017, and operates as a SAAS platform, which allows users
to track and manage value, profit, loss and other information regarding their investments in cryptocurrencies available via web-based
or mobile application. Prior to December 2017, CoinTracking, GmbH operated as a sole proprietorship starting in 2013.

Technology

The
Company is developing proprietary technology, including trading management and auditing software, tools and processes to assist
both our own operations and traditional companies, from start-up businesses to well-established companies. We may consider using
our technology to build additional units around our existing platform, or selling or licensing our technology to third party institutions
for a fee.

Media
and Ongoing Education

The
Company also engages in public discourse on an ongoing basis and regularly host roundtable webinars to educate the public about
the cryptocurrency market.

NOTE
2 - SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

Basis
of presentation - The included balance sheet as of December 31, 2017, was derived from audited financial statements and the
accompanying unaudited condensed consolidated financial statements as March 31, 2018 and 2017 of the Company have been prepared
in accordance with accounting principles generally accepted in the United States of America (“US GAAP”) for interim
financial information and pursuant to the instructions to Form 10-Q and Article 8-03 of Regulation S-X. Accordingly, they do not
include all of the information and footnotes required by US GAAP for complete financial statements. In the opinion of management,
all adjustments, consisting of normal recurring adjustments, considered necessary for a fair presentation of the condensed consolidated
financial statements have been included.

The
results of operations for interim periods are not necessarily indicative of the results to be expected for future quarters or
for the full year.

The
accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated
financial statements and notes thereto included in the Annual Report on Form 10-K for the period from March 9, 2017 (“Inception”),
through December 31, 2017, filed with the Securities and Exchange Commission on April 2, 2018.

Consolidation
- The condensed consolidated financial statements include the accounts of the Company and its wholly owned subsidiaries, Crypto
Sub and CoinTracking, LLC and its 50.1% ownership of CoinTracking, GmbH. All significant intercompany accounts and transactions
are eliminated in consolidation.

7

Liquidity
- The Company had limited revenues during the three months ended March 31, 2018, or since inception of March 9, 2017, limited
to realized gains on investments in cryptocurrency and software subscription revenue from their CoinTracking business acquisition.
The Company has raised an aggregate of $12,281,997 in cash from common stock issuances from inception on March 9, 2017 through
March 31, 2018, and had $3,678,730 in cash as of March 31, 2018 and working capital of $2,612,740. Management believes that the
Company has adequate cash and liquid cryptocurrency holdings as of March 31, 2018 to meet its operating cash needs for the next
12-15 months. The Company has the ability to structure its variable and fixed costs to offset delays in raising additional capital
in the private or public markets. However, the Company has a limited operating history and its prospects are subject to risks,
expenses and uncertainties frequently encountered by early-stage companies. These risks include, but are not limited to, the uncertainties
of availability of financing and achieving future profitability. Management anticipates that the Company will be dependent, for
the near future, on investment capital to fund operating expenses. The Company intends to position itself so that it may be able
to raise funds through the capital markets. There can be no assurance that such financing will be available at terms acceptable
to the Company, if at all. Failure to generate sufficient cash flows from operations, raise capital or reduce certain discretionary
spending could have a material adverse effect on the Company’s ability to achieve its intended business objectives.

Use
of estimates - The preparation of these consolidated financial statements in conformity accounting principles generally accepted
in the United States of America requires management to make estimates and judgments that affect the reported amounts of assets,
liabilities, revenues, and expenses and the related disclosure of contingent assets and liabilities. The Company bases its estimates
on historical experience and on various other assumptions that it believes to be reasonable under the circumstances, the results
of which form the basis for making judgments about the carrying values of assets and liabilities that are not readily apparent
from other sources. The Company’s significant estimates and assumptions include but are not limited to the recoverability
and useful lives of long-lived assets, allocation of revenue on software subscriptions, valuation of goodwill from business acquisitions,
valuation and recoverability of investments, valuation allowances of deferred taxes, and stock-based compensation expenses. Actual
results may differ from these estimates. In addition, any change in these estimates or their related assumptions could have an
adverse effect on the Company’s operating results.

Cash
and cash equivalents - The Company defines its cash and cash equivalents to include only cash on hand and certain highly liquid
investments with original maturities of ninety days or less. The Company maintains its cash and cash equivalents at financial
institutions, the balances of which may, at times, exceed federally insured limits. Management believes that the risk of loss
due to the concentration is minimal.

Investments
- Investments are comprised of several cryptocurrencies and are reported at fair value as determined by digital asset markets
with realized gains and losses calculated on a trade data basis as the difference between the fair value and cost of cryptocurrencies
transferred. The Company recognizes the fair value changes in unrealized appreciation or depreciation on investment through the
accompanying Statement of Operations. For the three-month period ended March 31, 2018, the Company had a consolidated balance
of $2,744,353 in investments. The Company believes that it would be able to liquidate a majority of its portfolio into cash within
24 hours, if needed. As of the Balance Sheet date, the Company’s holdings represent on average ~0.28% of the total volume
of trades on the specific exchanges where it would be able to convert its holdings to cash. The primary exchanges and principal
markets the Company utilizes for its trading are Kraken, Bittrex, Poloniex and Bitstamp which, in the aggregate, account
for approximately $105 million in Bitcoin/USD trades per day.

Equipment
- Equipment is recorded at cost and depreciated using the straight line method over the estimated useful life ranging from
three to five years. Normal repairs and maintenance are expensed as incurred. Expenditures that materially adapt, improve, or
alter the nature of the underlying assets are capitalized. When equipment are retired or otherwise disposed of, the cost and related
accumulated depreciation are removed from the accounts, and the resulting gain or loss is credited or charged to income.

Impairment
of long lived assets - The Company analyzes its long-lived assets for potential impairment. Impairment losses are recorded
on long-lived assets when indicators of impairment are present and the undiscounted cash flows estimated to be generated by those
assets are less than the net carrying amount of the assets. In such cases, the carrying values of assets to be held and used are
adjusted to their estimated fair value, less estimated selling expenses. For the three-month period ended March 31, 2018, the
Company recognized no impairment losses on its long-lived assets.

Business
combination - The purchase price of an acquired company is allocated between tangible and intangible assets acquired and liabilities
assumed from the acquired business based on their estimated fair values with the residual of the purchase price recorded as goodwill.
The results of operations of acquired businesses are included in our operating results from the dates of acquisition.

Goodwill
- The Company records the excess of purchase price over the fair value of the tangible and identifiable intangible assets
acquired as goodwill. Goodwill and intangible assets with indefinite lives are tested for impairment at least annually and whenever
events or circumstances occur indicating that a possible impairment may have been incurred. Intangible assets with finite lives
are amortized over their useful lives.

8

The
Company assesses whether goodwill impairment exists using both the qualitative and quantitative assessments. The qualitative assessment
involves determining whether events or circumstances exist that indicate it is more likely than not that the fair value of a reporting
unit is less than its carrying amount, including goodwill. If based on this qualitative assessment the Company determines it is
more likely than not that the fair value of a reporting unit is less than its carrying amount, or if the Company elects not to
perform a qualitative assessment, a quantitative assessment is performed to determine whether a goodwill impairment exists at
the reporting unit.

Based
on its analysis, the Company’s management believes that no impairment of the carrying value of its goodwill existed at March
31, 2018. There can be no assurance however, that market conditions will not change or demand for the Company’s products
and services will continue which could result in impairment of goodwill in the future.

Foreign
Currency Translation - Results of foreign operations are translated into U.S. dollars using average rates prevailing throughout
the period, while assets and liabilities are translated in U.S. dollars at period end foreign exchange rates. Transactions gains
and losses resulting from exchange rate changes on transactions denominated in currencies other than the functional currency of
the applicable subsidiary are included in the consolidated statements of operations, within other (income) expense, net, in the
year in which the change occurs. The Company’s functional currency is U.S. dollars while the functional currency for CoinTracking
is in Euros.

Income
taxes - Deferred tax assets and liabilities are recognized for expected future consequences of events that have been included
in the financial statements or tax returns. Under the asset and liability method, deferred income tax assets and liabilities are
determined based on the differences between the financial reporting and tax bases of assets and liabilities and are measured using
the currently enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based
on available evidence, are not expected to be realized. The provision for income taxes represents the tax payable for the period
and the change during the period in deferred tax assets and liabilities. For the three-month period ended March 31, 2018, the
income tax payable of $800 reflects the minimum franchise tax for the State of California.

When
tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately
sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions
that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50
percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated
with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax
benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

Fair
value measurements - The Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that
prioritizes the inputs to valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations
based upon unadjusted quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest
priority to valuations based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level
of input has different levels of subjectivity and difficulty involved in determining fair value.

Level
1

Inputs
are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurable date.

Level
2

Inputs,
other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market
data at the measurement date.

Level
3

Unobservable
inputs that reflect management’s best estimate of what participants would use in pricing the asset or liability at the
measurement date.

The
carrying amounts of the Company’s financial assets and liabilities, including cash, accounts payable, and accrued liabilities
approximate fair value because of the short maturity of these instruments.

Revenue
recognition – The Company has two streams of principal revenue segments as of March 31, 2018. The Company records the
realized gain or loss on the investments on a trade date basis. The changes in unrealized appreciation or depreciation on the
investments are measured to market on the last day of every month at 11:59 p.m., Pacific Time, based on publicly available cryptocurrency
exchanges. The Company classifies investments in cryptocurrency as trading investments. Trading generally reflects active and
frequent buying and selling, and is generally used with the objective of generating profits on short-term difference in price.

9

The
Company also has subscription revenues through its subsidiary Coin Tracking LLC and significantly minimal amounts of consulting
revenue. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 supersedes nearly
all existing revenue recognition guidance under GAAP. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified
retrospective transition method for contracts as of the date of initial application. There is no cumulative impact to the Company’s
retained earnings at January 1, 2018. See “Note 5 - Revenue Recognition” for additional information on the impact
to the Company.

Stock-based
compensation - In accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), the Company
measures the compensation costs of stock-based compensation arrangements based on the grant date fair value of granted instruments
and recognizes the costs in financial statements over the period during which employees are required to provide services. Stock-based
compensation arrangements include stock options.

Equity
instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments,
as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”), defines the measurement date
and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined,
is reached or (b) when the earlier of (i) the non-employee performance is complete and (ii) the instruments are vested. The compensation
cost is remeasured at fair value at each reporting period when the award vests. As a result, stock option-based payments to non-employees
can result in significant volatility in compensation expense.

The
Company accounts for its stock based compensation using the Black-Scholes model to estimate the fair value of stock option awards.
Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company’s
common stock price, (ii) expected life of the award, which for options is the period of time over which employees and non-employees
are expected to hold their options prior to exercise, and (iii) risk-free interest rate.

Risks
and uncertainties - The Company is subject to various risks including market risk, liquidity risk, and other risks related
to its investments in cryptocurrency. Investing in cryptocurrency is currently unregulated, highly speculative, and volatile.

The
prices of cryptocurrency could materially and adversely affect an investment in the shares of the Company. The prices of the cryptocurrencies
have a limited history. During such history, the cryptocurrencies’ prices have been volatile and subject to influence by
many factors including the levels of liquidity. If the cryptocurrency’s markets continue to experience significant price
fluctuations, the Company may experience losses. Several factors may affect the prices of the cryptocurrencies, including, but
not limited to, global cryptocurrency supply and demand, and competition from other forms of digital currency or payments services.

There
is currently no clearing house for cryptocurrency, nor is there a central or major depository for the custody of cryptocurrency.
There is a risk that some or all of the Company’s cryptocurrencies could be lost or stolen. The Company does not have insurance
protection on its cryptocurrency which exposes the Company and its shareholders to the risk of loss of the Company’s cryptocurrency.
Further, cryptocurrency transactions are irrevocable. Stolen or incorrectly transferred of cryptocurrency may be irretrievable.
As a result, any incorrectly executed cryptocurrency transactions could adversely affect an investment in the Company.

To
the extent private keys for the cryptocurrency’s addresses are lost, destroyed or otherwise compromised and no backup of
the private keys are accessible, the Company may be unable to access the cryptocurrency held in the associated address and the
private key will not be capable of being restored by the cryptocurrency network.

The
processes by which cryptocurrency transactions are settled are dependent on the cryptocurrency peer-to-peer network, and as such,
the Company is subject to operational risk. A risk also exists with respect to previously unknown technical vulnerabilities, which
may adversely affect the value of the cryptocurrencies.

Net
loss per common share - The Company reports earnings per share (“EPS”) with a dual presentation of basic EPS and
diluted EPS. Basic EPS is computed as net income divided by the weighted average of common shares for the period. Diluted EPS
reflects the potential dilution that could occur from common shares issued through stock options, or warrants. For the three-month
period ended March 31, 2018, the Company had no potentially dilutive common stock equivalents. Therefore, the basic EPS and the
diluted EPS are the same.

10

Marketing
expense - Marketing expenses are charged to operations, under general and administrative expenses. For the three-month period
ended March 31, 2018 and for the period from Inception, March 9, 2017 through March 31, 2017, the Company incurred $48,699 and
$0, respectively, in marketing expenses.

NOTE
3 - RECENT ACCOUNTING PRONOUNCEMENTS

In
July 2017, the Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update (“ASU”)
2017-11, Earnings Per Share (Topic 260), Distinguishing Liabilities from Equity (Topic 480) and Derivatives and Hedging (Topic
815): I. Accounting for Certain Financial Instruments with Down Rounds and II. Replacement of the Indefinite Deferral for Mandatorily
Redeemable Financial Instruments of Certain Nonpublic Entities and Certain Mandatorily Redeemable Noncontrolling Interests with
a Scope Exception. This ASU changes the classification analysis of certain equity-linked financial instruments (or embedded
features) with down round features. When determining whether certain financial instruments should be classified as liabilities
or equity instruments, a down round feature no longer precludes equity classification when assessing whether the instrument is
indexed to an entity’s own stock. The amendments also clarify existing disclosure requirements for equity-classified instruments.
The amendments also require entities to recognize the effect of the down round feature on earnings per share when it is triggered.
ASU 2017-11 should be adopted retrospectively or as a cumulative-effect adjustment as of the date of adoption, only to financial
instruments outstanding as of the initial application date. ASU 2017-11 will be effective for annual reporting periods, and interim
periods within those annual periods, beginning after December 15, 2018. Early adoption is permitted, including adoption in an
interim period. The adoption of this guidance is not expected to have a material impact on the Company’s consolidated financial
statements and related disclosures.

In
May 2017, the FASB issued ASU No. 2017-09, Compensation - Stock Compensation (Topic 718): Scope of Modification Accounting, which
provides guidance about which changes to the terms or conditions of a share-based payment award require an entity to apply modification
accounting. Essentially, an entity will not have to account for the effects of a modification if: (1) The fair value of the modified
award is the same immediately before and after the modification; (2) the vesting conditions of the modified award are the same
immediately before and after the modification; and (3) the classification of the modified award as either an equity instrument
or liability instrument is the same immediately before and after the modification. The new standard became effective for us on
January 1, 2018. The Company has evaluated the impact of Topic 718 on its financial statements and the adoption of this guidance
will not have a material impact on the Company’s consolidated financial statements and related disclosures.

FASB
ASU 2017-01 “Clarifying the Definition of a Business (Topic 805)” – In January 2017, the FASB issued 2017-1.
The new guidance that changes the definition of a business to assist entities with evaluating when a set of transferred assets
and activities is a business. The guidance requires an entity to evaluate if substantially all of the fair value of the gross
assets acquired is concentrated in a single identifiable asset or a group of similar identifiable assets; if so, the set of transferred
assets and activities is not a business. The guidance also requires a business to include at least one substantive process and
narrows the definition of outputs by more closely aligning it with how outputs are described in ASC 606. The ASU is effective
for annual reporting periods beginning after December 15, 2017, and for interim periods within those years. Adoption of this ASU
did not have a significant impact on our consolidated results of operations, cash flows and financial position.

FASB
ASU 2017-04 “Simplifying the Test for Goodwill Impairment (Topic 350)” – In January 2017, the FASB issued 2017-04.
The guidance removes “Step Two” of the goodwill impairment test, which required a hypothetical purchase price allocation.
A goodwill impairment will now be the amount by which a reporting unit’s carrying value exceeds its fair value, not to exceed
the carrying amount of goodwill. The ASU is effective for annual reporting periods beginning after December 15, 2019, and for
interim periods within those years, with early adoption permitted. We do not currently expect this ASU to have a significant impact
on our consolidated financial statements and related disclosures.

In
February 2016, the FASB issued ASU No. 2016-02, Leases (Topic 842), which, among other things, requires lessees to recognize most
leases on their balance sheets related to the rights and obligations created by those leases. The new standard also requires new
disclosures to help financial statement users better understand the amount, timing, and uncertainty of cash flows arising from
leases. The new standard becomes effective for us on January 1, 2019. Early adoption is permitted. The amendments in this update
should be applied under a modified retrospective approach. We are evaluating the effect that ASU No. 2016-02 will have on our
consolidated financial statements and related disclosures.

NOTE
4 - ACQUISITION

On
January 26, 2018, CoinTracking LLC, a wholly-owned subsidiary of the Company, acquired 50.1% of the equity interest in CoinTracking
GmbH, for (i) $4,736,400 in cash and (ii) 473,640 shares of common stock of the Company at $10 per share for total purchase price
valued at $9,472,800. CoinTracking, with its newly acquired subsidiary, provides its customers with access to cryptocurrency token
tracking, portfolio management, and tax calculation and reporting. The acquisition was to increase our presence in the digital
asset industry and build strategic alliances.

11

The
combined statements of operations were prepared using the acquisition method of accounting in accordance with Financial Accounting
Standards Board Accounting Standards Codification (“ASC”) Topic 805, Business Combinations, and have been included
in the Company’s consolidated results as of acquisition date with Crypto Company considered as the accounting acquirer and
Coin Tracking as the accounting acquiree.

Accordingly,
consideration paid by the Company to complete the acquisition was allocated to the identifiable assets and liabilities
of CoinTracking, GmbH based on estimated fair values as of the closing date. We made a preliminary allocation of the consideration
transferred to the assets acquired and liabilities assumed based on the information available and preliminary valuation of the
fair value of tangible and intangible assets acquired and liabilities assumed. Acquisition-related costs were expensed as incurred
and were not considered to be significant. We expect to include the final purchase price allocation related to this acquisition
in our Quarterly Report on Form 10-Q for the period ended June 30, 2018. Therefore, the valuation of certain assets and liabilities
in the CoinTracking, GmbH acquisition is preliminary and subject to change.

The
table below summarizes the fair values of the assets acquired and liabilities assumed at the date of acquisition:

CoinTracking

Cash
and cash equivalents

$

1,547,097

Investment
in cryptocurrency

1,115,345

Other
current assets

479,057

Goodwill

10,325,631

Other
assets

144,566

Total
assets

$

13,611,696

Current
liabilities

$

522,172

Contract
liabilities, short term

2,686,858

Contract
liabilities, long term

929,866

Total
liabilities

4,138,896

Net
assets acquired

$

9,472,800

The
purchase price was based on the expected financial performance of CoinTracking, GmbH and not on the value of the net identifiable
assets at the time of acquisition. This resulted in a significant portion of the purchase price being attributed to goodwill.
As a result, the Company recognized $10,325,631 of goodwill on the acquisition.

Based
on its analysis, the Company’s management believes that no impairment of the carrying value of its goodwill existed at March
31, 2018. There can be no assurance however, that market conditions will not change or demand for the Company’s products
and services will continue which could result in impairment of goodwill in the future.

Unaudited
pro forma financial information

The
unaudited pro forma financial information in the table below presents the combined results of the Company and Coin Tracking as
if these acquisitions had occurred on January 1, 2018. The unaudited pro forma financial information includes adjustments required
under the acquisition method of accounting and is presented for informational purposes only and is not necessarily indicative
of the results that would have been achieved had the acquisitions actually occurred on January 1, 2018.

For
the three months ended March 31, 2018:

Revenue

$

1,645,260

Net
loss

$

(3,229,423

)

Basic
and diluted loss per share:

Basic

$

(0.15

)

Diluted

$

(0.15

)

12

NOTE
5 – SUBSCRIPTION REVENUE RECOGNITION

Revenue
Recognition

CoinTracking
accounts for a contract when it has approval and commitment from all parties, the rights of the parties and payment terms are
identified, the contract has commercial substance and collectability of consideration is probable. Revenue is recognized when
control of the promised services is transferred to our customers, and in an amount that reflects the consideration the Company
is contractually due in exchange for those services. Most of the Company’s contracts with customers are single, or have
few distinct performance obligations, the transaction price is allocated to each performance obligation using the stand-alone
selling price.

CoinTracking’s
revenue is primarily derived directly from users in the form of subscriptions. Subscription revenue is presented net of credits
and credit card chargebacks. Subscribers pay in advance, primarily by Paypal or cryptocurrencies, and, subject to certain conditions
identified in our terms and conditions. Revenue is initially deferred and is recognized using the straight-line method over the
terms of the applicable subscription period, which primarily range from one to three years.

Transaction
Price

The
objective of determining the transaction price is to estimate the amount of consideration the Company is due in exchange for services,
including amounts that are variable. CoinTracking has a standalone sales price for each subscription service. Further, The Company
excludes from the measurement of transaction price all taxes assessed by governmental authorities that are both (i) imposed on
and concurrent with a specific revenue-producing transaction and (ii) collected from customers. Accordingly, such tax amounts
are not included as a component of revenue or cost of revenue.

Estimates
of certain revenue

Revenue
collected in advance for subscriptions ranging 1 or 2 years or lifetime packages are deferred and recognized as revenue on a straight-line
basis over the terms of the applicable subscription period or performance obligation period. For “lifetime” revenue
packages, where the customer has access to the website for unlimited length of time, the Company has elected to recognize revenue
on a straight-line basis over three years. We believe that based on the short history of customer data, customer relationship
period, and number of available alternative providers, and anticipation of future changes to the blockchain industry, a measure
of three years of performance obligation to our customers appears to be appropriate. The Company intends to re-evaluate the length
of the performance obligation period for lifetime revenue packages periodically based on historical and industry data and adjust
it as deemed necessary.

Net
Revenue and Charge-back Reserves

CoinTracking
does not maintain an allowance for doubtful accounts because the customer prepays for subscription in advance before access is
provided to Coin Tracking’s website. The Company also maintains allowances to reserve for potential credits issued to consumers
or other revenue adjustments primarily through Paypal reserves. We recorded a reserve of $160,436 at March 31, 2018 which is based
primarily upon historical experience.

Contract
Liabilities

Contract
liabilities are recorded when payments are received or due in advance of performing our service obligations and is recognized
over the service period, which primarily relates to prepayments of subscription revenue. At the acquisition date of Jan 26, 2018,
CoinTracking’s total contract liabilities were $3,616,724, and we recognized revenue of $456,922 as of March 31, 2018. As
of March 31, 2018, $3,033,817, of current contract liabilities were recorded and $1,433,858 of long term contract liabilities
were recorded, respectively. As of December 31, 2017, we did not have consolidated contract liabilities.

Assets
Recognized from the Costs to Obtain a Contract with a Customer

CoinTracking
has determined that certain costs, primarily referral commissions or affiliate payments paid to customers pursuant to certain
sales incentive programs, meet the requirements to be capitalized as a cost of obtaining a contract. Affiliate expenses are paid
in Bitcoins, as a sales incentive programs and are amortized over the subscription period. For sales incentive programs where
the subscription period is one year, the Company has elected the practical expedient to expense the costs as incurred. The Company
generally capitalizes over the term of the applicable subscription.

13

During
the three months ended March 31, 2018, the Company recognized expense of $30,654 related to the amortization of these costs. The
aggregate contract asset balance at March 31, 2018 is $126,140.

NOTE
6 - SEGMENT INFORMATION

The
Company has organized its operations into two segments: trading in cryptocurrencies and subscription in CoinTracking’s,
web-based platform.

The
trading segment primarily consists of amounts earned through trading activities of cryptocurrencies and costs are operating expenses
that consists of general and administrative costs in North America.

CoinTracking’s
segment primarily consists of amounts earned through subscriptions to the CoinTracking website. Operating expense related to this
segment is technology infrastructure and general administrative costs primarily incurred in Germany.

There
are no intercompany internal revenue transactions between our reportable segments. These segments reflect the way our chief operating
decision maker evaluates the Company’s business performance and manages its operations.

The
following table summarizes the Company’s operating income by segment for the three-month period ended March 31, 2018:

Three
months ended

3/31/2018

Trading

Subscription

Total

Revenue,
net

$

1,072,598

$

456,992

$

1,529,590

Costs
and Expenses

(1,439,020

)

(705,960

)

(2,144,980

)

Operating
Loss

$

(366,422

)

$

(248,968

)

$

(615,390

)

The
trading segment’s costs and expenses were offset by a favorable impact of share-based compensation of $708,139 as of March
31, 2018. This $708,139 was recorded as an offset to operating expenses in the accompanying statement of operations and comprehensive
loss for the quarter ended March 31, 2018 and was a result in the decline of the estimated value of the Company’s common
stock during the three months ended March 31, 2018.

The
following table summarizes the Company’s operating income by segment for the period from Inception, March 9, 2017 to March
31, 2017:

Inception
to 3/31/2017

Trading

Subscription

Total

Revenue

$

-

$

-

$

-

Costs
and Expenses

(660,016

)

-

(660,016

)

Operating
Income

$

(660,016

)

$

-

$

(660,016

)

NOTE
7 - INVESTMENT IN CRYPTOCURRENCY

The
investment in cryptocurrency is classified as a Level 2 asset because inputs are from cryptocurrency exchanges with price variability.
The following table summarizes the Company’s investments at fair value for the three-month period ended March 31, 2018:

Level
1

Level
2

Level
3

Investment
in cryptocurrency

$

-

$

2,426,724

$

317,629

The
Company establishes processes and procedures to ensure that the valuation methodologies that are categorized within Level 3 are
fair, consistent and verifiable. Valuation of the Company’s Level 3 investments are for Initial Coin Offerings (“ICO’s”)
for which there is no active market at March 31, 2018. These ICO’s are valued at cost which approximates fair value at March
31, 2018. At the time that the ICO’s have an available market exchange, the investments will be reclassified to Level 2.

14

The
following table sets forth a summary of changes in the fair value of the Company’s Level 3 investments for the three-month
period ended March 31, 2018:

Level
3

Cryptocurrency

Balance
at December 31, 2017

$

167,818

Transfers
to Level 2 investments

(50,189

)

Purchases,
sales, issuances, and settlement, net

200,000

Balance,
March 31, 2018

$

317,629

The
following table summarizes the cryptocurrencies, other than ICO’s, held as of March 31, 2018:

Bitcoin

$

1,344,914

Ethereum

106,123

Polymath

83,928

Ripple

78,336

Litecoin

69,244

Bitcoin
Cash

56,283

blockVEE

48,495

Cardano

37,955

Dash

31,484

EOS

35,858

Various
other currencies

534,104

$

2,426,724

NOTE
8 - EQUIPMENT

Equipment
consists of the following:

March
31, 2018

December
31, 2017

Computer
equipment

$

225,241

$

69,241

Furniture
equipment

15,167

3,754

240,408

72,995

Less
accumulated depreciation

(21,776

)

(4,675

)

$

218,632

$

68,320

NOTE
9 - SUMMARY OF COMMON STOCK TRANSACTIONS

On
March 20, 2018, upon exercise of a stock option by a consultant of the Company, the Company issued 7,031 shares of common stock
at an exercise price of $0.01 per share.

On
January 31, 2018, upon partial exercise of a stock option by an employee of the Company, the Company issued 14,667 shares of common
stock as a cashless exercise.

During the quarter ended March 31, 2018,
an employee exercised a stock option for 12,494 shares of common stock at an exercise price of $2.00 per share. As of March 31,
2018, these shares have not yet been issued and, as a result, there is a common stock payable of $24,988 at March 31, 2018 in
the accompanying balance sheet.

On
January 16, 2018, pursuant to an Equity Purchase Agreement (the “Agreement”) entered into on December 22, 2017 by
and among the Company, CoinTracking, LLC, a Nevada limited liability company and wholly-owned subsidiary of the Company (“CoinTracking”),
Kachel Holding GmbH, an entity formed under the laws of the Republic of Germany (“Kachel Holding”), and Dario Kachel,
an individual, CoinTracking purchased from Kachel Holding 12,525 shares of CoinTracking GmbH, an entity formed under the laws
of Germany (“CoinTracking GmbH”), representing 50.1% of the equity interests in CoinTracking GmbH, for a purchase
price which consisted, in part, of 473,640 shares of common stock of the Company (the “CoinTracking Acquisition”).
The transaction closed on January 26, 2018 (see Note 4).

15

NOTE
10 – WARRANTS FOR COMMON STOCK

For
the three-month period ended March 31, 2018, no stock purchase warrants were issued. As of March 31, 2018, outstanding warrants
to purchase shares of common stock were as follows:

Number
of Shares

Issuance
Date

Exercisable

for

Expiration

Date

Exercise

Price

Outstanding

Under
Warrants

September
2017

Common
Shares

September
25, 2020

$

2.00

168,125

The
warrants expire on the third anniversary of their respective issuance dates. The exercise price of the warrants is subject to
adjustment from time to time, as provided therein, to prevent dilution of purchase rights granted thereunder. The warrants are
considered indexed to the Company’s own stock and therefore no subsequent remeasurement is required.

NOTE
11 - SUMMARY OF STOCK OPTIONS

On
July 21, 2017, the Company’s board of directors adopted the 2017 Equity Incentive Plan (the “Plan), which was approved
by its stockholders on August 24, 2017. The Plan is administered by the board of directors (the “Administrator”).
Under the Plan, the Company may grant equity awards to eligible participants which may take the form of stock options (both incentive
stock options and non-qualified stock options) and restricted stock awards. Awards may be granted to officers, employees, nonemployee
directors (as defined in the Plan) and other key persons (including consultants and prospective employees). The term of any stock
option award may not exceed 10 years and may be subject to vesting conditions, as determined by the Administrator. Options granted
generally vest over eighteen months. Incentive stock options may be granted only to employees of the Company or any subsidiary
that is a “subsidiary corporation” within the meaning of Section 424(f) of the Internal Revenue Code.

5,000,000
shares of the Company’s common stock are reserved for issuance under the Plan. For the three-month period ended March 31,
2018, there are outstanding stock option awards issued from the Plan covering a total of 807,031 shares of the Company’s
common stock and there remain reserved for future awards 4,171,271 shares of the Company’s common stock. The weighted average
exercise price of the outstanding stock options is $3.46 per share, and the remaining contractual term is 9.45 years.

During
the three-month period ended March 31, 2018, the Company granted 150,000 options to nonemployees.

Weighted

Weighted

Average

Aggregate

Average

Remaining

Intrinsic

Number

Exercise

Contractual

Value

of Shares

Price

Term (years)

(in thousands)

Options outstanding, at December 31, 2017

644,531

$

2.32

9.61

$

11,421

Options granted

150,000

$

8.00

9.83

6,600

Options exercised

37,858

$

1.63

9.37

1,907

Options outstanding, at March 31, 2018

756,668

$

3.46

9.45

$

36,729

Vested and exercisable and expected to vest, end of period

160,834

$

2.93

9.35

$

7,892

During
the three-month period ended March 31, 2018 and the period from Inception, March, 9, 2017 through March 31, 2017 the Company had
not granted any restricted stock awards.

As
of March 31, 2018, approximately $118,094 of total unrecognized compensation costs related to stock options is expected to be
recognized over a weighted average period of approximately 2 years.

The
determination of the fair value of stock-based compensation awards utilizing the Black-Scholes model is affected by the Company’s
stock price and a number of complex and subjective assumptions, including stock price, volatility, expected life of the equity
award, forfeitures rates if any, risk-free interest rates and expected dividends. Volatility is based on the historical volatility
of comparable companies measured over the most recent period, generally commensurate with the expected life of the Company’s
stock options, adjusted for future expectations given the Company’s limited historical share price data.

The
risk-free rate is based on implied yields in effect at the time of the grant on U.S. Treasury zero-coupon bonds with remaining
terms equal to the expected term of the stock options. The expected dividend is based on the Company’s history and expectation
of dividend payouts. Forfeitures are recognized when they occur.

16

The
range of assumptions used for the three-month period ended March 31, 2018 are as follows:

March
31, 2018

Ranges

Weighted-average
volatility

36-75

%

Expected
dividends

0

%

Expected
term (in years)

5.71-10
years

Risk-free
rate

1.91-2.40

%

During
the three months ended March 31, 2018, there was a decline of the estimated value of the Company’s common stock. As a result,
at March 31, 2018, the credit balance of $708,139 share based compensation represents an adjustment to offset the previously recorded
stock compensation costs during 2017, as stock options issued to nonemployees are revalued at each vesting tranche and/or reporting
date in accordance with ASC 505.

NOTE
12 - RELATED PARTY TRANSACTIONS

On
March 9, 2017, Crypto Sub issued 125,000 shares of common stock of Crypto Sub to an employee of Crypto Sub, in exchange for an
initial investment made in the form of cryptocurrency, valued at $100,000, based on the fair value of the investment on the date
of such investment. In addition, based on the fair value of the shares of common stock of the Company at the time of issuance,
the Company recorded an additional $100,000 of share based compensation expense related to the transaction.

On
March 9, 2017, Crypto Sub issued 300,000 shares of common stock of Crypto Sub to James Gilbert, the Chairman, Chief Executive
Officer and President of the Company, in exchange for $200,000. In addition, based on the fair value of the shares of common stock
of the Company at the time of issuance, the Company recorded an additional $280,000 of share based compensation expense related
to the transaction.

On
March 9, 2017, Crypto Sub issued (i) 125,000 shares of common stock of Crypto Sub to Redwood Fund LP (“Redwood”) in
exchange for $200,000; and (ii) 125,000 shares of common stock of Crypto Sub to Imperial Strategies, LLC (“Imperial Strategies”)
in exchange for certain services rendered, valued at $200,000, as of the date of such issuance. Michael Poutre, the Chief Executive
Officer of the Company, and Ron Levy, the Chief Operating Officer of the Company, are Chief Executive Officer and Chief Operating
Officer, respectively, of Ladyface Capital, LLC, the General Partner of Redwood, and, as a result, had an indirect material interest
in the shares owned by Redwood.

The
Company has a services agreement with Full Stack Finance for CFO and Accounting outsource services. Ivan Ivankovich, CFO of the
Company, is the Co- Managing Director of Full Stack Finance. Emad Boulos, an employee of Full Stack Finance, serves as The Crypto
Company’s Controller. The Company paid a total of $138,259 in fees to Full Stack Finance during the three-month period ended
March 31, 2018, and as of March 31, 2018, there was a balance of $68,000 due to Full Stack Finance, which is included in accounts
payable and accrued expenses on the accompanying balance sheet.

The
Company has a loan receivable from an officer of CoinTracking GmbH as of March 31, 2018 totaling $194,380. The loan is due upon
demand and it bears interest at 2%. During the quarter ended March 31, 2018 and the period from March 9, 2017 to March
31, 2017 interest income accrued for this loan was $295 and $0, respectively, which is included in other income on the accompanying
statement of operations.

NOTE
13 - BASIC AND DILUTED LOSS PER SHARE

The
following is a reconciliation of the numerator and denominator of the basic and diluted loss per share computations for the three-month
period ended March 31, 2018:

For
the three months ended March 31, 2018

Numerator
for basic and diluted income per share:

Comprehensive
loss attributable to The Crypto Company

$

(3,153,118

)

Denominator
for basic and diluted income per share:

Weighted
average shares (basic)

20,864,198

Common
stock equivalents

-

Weighted
average shares (diluted)

20,864,198

Basic
and diluted income (loss) per share:

Basic

$

(0.15

)

Diluted

$

(0.15

)

17

NOTE
14 - COMMITMENTS AND CONTINGENCIES

Operating
leases - On May 15, 2017, the Company entered into a lease agreement with Soba Living, LLC for the rental of office space.
The agreement is a month to month lease, which requires monthly rents of $6,000 through September 30, 2018.

On
January 18, 2018, the Company entered into a short-term lease agreement with Miramar Property Investment Co., for an office space
on a month-to-month basis, requiring monthly rents of $3,024 expiring through September 30, 2018.

Facility
rent expense for the three-month period ended March 31, 2018 and the period from March 9, 2017 to March 31, 2017 was $25,023 and
$0, respectively.

Legal
- From time to time, the Company may become subject to legal proceedings, claims, and litigation arising in the ordinary course
of business, none of which, in management’s opinion, will result in judgments that would have a material adverse effect
on the financial position or results of operations of the Company. Please see a summary of legal proceedings in Item 1 of Part
II of this Quarterly Report, all of which have been voluntarily dismissed as of the date of this Quarterly Report.

Indemnities
and guarantees - During the normal course of business, the Company has made certain indemnities and guarantees under which
it may be required to make payments in relation to certain transactions. These indemnities include certain agreements with the
Company’s officers and directors, under which the Company may be required to indemnify such persons for liabilities arising
out of their respective relationships. In connection with its facility lease, the Company has indemnified the lessor for certain
claims arising from the use of the facility. The duration of these indemnities and guarantees varies and, in certain cases, is
indefinite. The majority of these indemnities and guarantees do not provide for any limitation of the maximum potential future
payments the Company could be obligated to make. Historically, the Company has not been obligated to make significant payments
for these obligations and no liabilities have been recorded for these indemnities and guarantees in the accompanying balance sheet.

NOTE
15 – SUBSEQUENT EVENTS

On
April 3, 2018, CoinTracking, LLC, a Nevada limited liability company and a wholly-owned subsidiary of the Company (“Borrower”),
entered into a Loan Agreement (the “Loan Agreement”) with CoinTracking GmbH, a private limited liabilty company organized
under the laws of the Federal Republic of Germany (“Lender”), pursuant to which Lender may provide a loan (the “CoinTracking
Loan”) of up to $3,000,000 to Borrower, to be advanced to Borrower in one or more tranches, at such times and in such amounts
as may be requested by Borrower from time to time, on or before the tenth anniversary of the Loan Agreement. The Company is deemed
obligor of Borrower’s obligations under the Loan Agreement for United States Federal income tax purposes. Interest on the
CoinTracking Loan will accrue at a rate per annum of the greater of (i) three percent (3%), or (ii) the interest rates published
monthly by the United States Internal Revenue Service and in effect under section 1274(d) of the Internal Revenue Code in effect
as of the date of issuance of any promissory note under the CoinTracking Loan, and will be payable quarterly. On April 3, 2018,
pursuant to the Loan Agreement, Lender advanced $1,000,000 to Borrower in exchange for a promissory note (the “CoinTracking
Note”) of equal principal amount. The CoinTracking Note will mature on the second anniversary thereof. The Borrower and
Lender are consolidating entities, as such, the loan and advances are considered to be intercompany transactions and will be eliminated
in consolidation.

Effective
as of April 17, 2018, Jeffrey Berman and Holly Ruxin were appointed directors of the Company, each for a term of six months from
the effective date of appointment or until his or her earlier death, resignation or removal. The Company entered into a Director
Services Agreement with each of Mr. Berman and Ms. Ruxin, pursuant to which each of Mr. Berman and Ms. Ruxin will be entitled
to receive (i) a fee of $80,000 per annum, payable quarterly, and (ii) a ten-year option to purchase 100,000 shares of common
stock of the Company at an exercise price of $10.00 per share, which option shall be fully vested on the six-month anniversary
of the date of grant.

Effective
as of April 18, 2018, Anthony Strickland, Jeffrey Berman, and Holly Ruxin were appointed to the Audit Committee and Compensation
Committee, with Ms. Ruxin serving as Chairperson of the Audit Committee and Mr. Strickland Serving as Chairperson of the Compensation
Committee.

On
April 18, 2018, the Company issued to James Gilbert 202,512 shares of common stock of the Company, immediately vested, for certain
services performed on behalf of the Company.

Effective
May 14, 2018, Michael Poutre, former Chief Executive Officer and a director of the Company, resigned from all of his current roles
with the Company effective immediately. Mr. Poutre will remain as a consultant to the Company until November 2018. In connection
with Mr. Poutre’s resignation from the Company, the Company entered into a Separation and Consulting Agreement and General
Mutual Release (the “Separation and Consulting Agreement”), which was executed on May 9, 2018 and approved by the
Board of Directors on May 14, 2018. The Separation and Consulting Agreement was not effective until May 17, 2018, following the
end of the revocation period.

The
Separation and Consulting Agreement provides that the Company will pay Mr. Poutre a lump-sum cash payment of (i) his earned but
unpaid base salary, (ii) his accrued but unpaid vacation time, and (iii) any outstanding requests for expense reimbursements that
are approved pursuant to Company policy. Mr. Poutre will serve as a consultant of the Company for six months at a rate of $30,000
per month, payable in two separate tranches, though the Company may terminate his services for any reason. The Separation and
Consulting Agreement contains other standard provisions contained in agreements of this nature including non-disparagement and
a general release of any and all claims.

Effective May 14, 2018, James Gilbert, the President of the Company, was appointed Chairman of the Company’s
Board of Directors and Chief Executive Officer. The Company did not enter into any new employment agreement with Mr. Gilbert, and
Mr. Gilbert has no family relationship with any director or executive officer of the Company.

18

ITEM
2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

You
should read the following discussion of our financial condition and results of operations in conjunction with the condensed consolidated
financial statements and the related notes included elsewhere in this Quarterly Report and with our audited consolidated financial
statements included in our Annual Report on Form 10-K for the period from inception, March 9, 2017, through December 31, 2017,
filed with the Securities and Exchange Commission on April 2, 2018. In addition to historical condensed consolidated financial
information, the following discussion contains forward-looking statements that reflect our plans, estimates, and beliefs. Our
actual results could differ materially from those discussed in the forward-looking statements. Factors that could cause or contribute
to these differences include those discussed below and elsewhere in this Quarterly Report, particularly in Part II, Item 1A. “Risk
Factors.”

Overview
of Our Business

In
the discussion below, when we use the terms “we”, “us” and “our”, we are referring to The
Crypto Company and its wholly-owned subsidiaries, Crypto Sub, Inc. and CoinTracking, LLC.

We
are engaged in the business of building technological infrastructure, a proprietary investment portfolio and strategic alliances
to facilitate the exchange of value in the digital asset market and, specifically, to assist third parties with investing in,
trading and managing digital assets. We also invest in technologies and tokens in a manner that diversifies exposure to the growing
class of digital assets. From time to time, we may seek strategic acquisitions either by integrating third party teams and technology
with our core business or by funding third party teams in which we may have interest.

On
January 16, 2018, pursuant to an Equity Purchase Agreement (the “Agreement”) entered into on December 22, 2017 by
and among the Company, CoinTracking, LLC, a Nevada limited liability company and wholly-owned subsidiary of the Company (“CoinTracking”),
Kachel Holding GmbH, an entity formed under the laws of the Republic of Germany (“Kachel Holding”), and Dario Kachel,
an individual, CoinTracking purchased from Kachel Holding 12,525 shares of CoinTracking GmbH, an entity formed under the laws
of Germany (“CoinTracking GmbH”), representing 50.1% of the equity interests in CoinTracking GmbH, for a purchase
price of (i) $4,736,400 in cash, and (ii) 473,640 shares of common stock of the Company, par value $0.001 per share, subject to
adjustment as provided in the Agreement (the “CoinTracking Acquisition”). Following administrative procedures as required
under applicable German laws, the CoinTracking Acquisition was consummated on January 26, 2018. CoinTracking GmbH operates as
SAAS platform, which allows users to track and manage value, profit, loss and other information regarding their investments in
cryptocurrencies, available via web-based or mobile application.

Technology

We
are developing proprietary technology, including trading management and auditing software, tools and processes, to assist both
our own operations and traditional companies, from start-up businesses to well-established companies. We may use our technology
or license technology from third parties to build additional units around our existing platform, or sell or license our technology
to third party institutions for a fee.

We
have developed and are marketing and licensing algorithmic indices that track digital tokens and represent specific market segments,
such that one can more efficiently monitor and track trends and events in the digital token asset class. We have also developed
and launched a proprietary trading floor and operations related to the governance and management of professional trading operations.

Investment
Portfolio

In
addition to the Company’s ordinary operations, we also utilize a significant portion of our assets to trade a diversified
proprietary portfolio of digital assets. We do not accept or manage any investor, client, or other third party assets. We invest
solely the Company’s assets and incur no management fees.

Our
portfolio strictly adheres to proprietary investment strategies based on proprietary algorithms, processes and standards relating
to our trading and analysis, including our investments in coin offerings, developed and implemented by in-house traders, analysts,
researchers and other personnel experienced in trading cryptocurrencies who evaluate our investments

Strategic
Acquisitions

From
time to time, we may seek strategic acquisitions of majority and minority equity interests in entities and technology that demonstrate
(i) established, protectable and scalable revenues; (ii) substantial market share; (iii) established brand equity and customer
loyalty; (iv) proprietary technology with competitive advantages; (v) quality personnel; and (vi) strategic access to international
markets.

19

Media
Opportunities

We
engage in public discourse on an ongoing basis and regularly host roundtable webinars to educate the public about the cryptocurrency
market and intend to expand our presence at industry conferences to develop and expand our community and content network.

Recent
Events

Stock
Sale

On
June 7, 2017, the Company entered into (i) a Share Purchase Agreement (the “Restricted Share Purchase Agreement”)
with Crypto Sub and John B. Thomas P.C., in its sole capacity as representative for certain shareholders of the Company; and (ii)
a Share Purchase Agreement (the “Free Trading Share Purchase Agreement”, and together with the Restricted Share Purchase
Agreement, the “Share Purchase Agreements”) with Crypto Sub, Uptick Capital, LLC (“Uptick Capital”) and
John B. Thomas P.C., in its sole capacity as representative for certain shareholders of the Company. Pursuant to the Share Purchase
Agreements, the shareholders of the Company sold an aggregate of 11,235,000 shares of common stock of the Company to Crypto Sub
and 100,000 shares of common stock of the Company to Uptick Capital, representing an aggregate of 100% of the issued and outstanding
common stock of the Company as of such date, for aggregate proceeds of $411,650, including escrow and other transaction related
fees to the selling shareholders (the “Stock Sale”). A portion of the acquisition cost equal to $399,300 is expensed
as a general and administrative expense in the accompanying consolidated statement of operations.

10,000,000
shares held by Deborah Thomas, the former Chief Executive Officer, principal accounting and financial officer and director of
the Company, representing approximately 88.22% of the outstanding common stock of the Company immediately prior to the Stock Sale,
were sold at a price of $0.031 per share, and an aggregate of 1,335,000 shares held by the remaining shareholders of the Company
were sold at a price of $0.075 per share.

In
connection with the Stock Sale, effective as of June 7, 2017, (i) Deborah Thomas resigned as Chief Executive Officer, principal
accounting officer and director of the Company and Elliott Polatoff resigned as Secretary and director of the Company; and (ii)
Michael Poutre was appointed Chief Executive Officer and sole director of the Company, James Gilbert was appointed President of
the Company and Ron Levy was appointed Chief Operating Officer of the Company.

Stock
Dividend

On
June 7, 2017, Crypto Sub issued to its shareholders a stock dividend (the “Stock Dividend”) of 10,918,007 shares of
common stock of the Company acquired through the Stock Sale, distributed on a pro-rata basis, such that the shareholders of Crypto
Sub received fifteen shares of common stock of the Company for each share of common stock of Crypto Sub held as of June 6, 2017.

Immediately
following the consummation of the Stock Sale and the distribution of the Stock Dividend, Crypto Sub held 316,993 shares, representing
4.26% of the issued and outstanding shares of common stock of the Company, and the shareholders of Crypto Sub, collectively, held
10,918,007 shares, representing 94.40% of the issued and outstanding shares of common stock of the Company. Of the 316,993 shares
held by Crypto Sub, 129,238 shares were transferred to certain officers and consultants of Crypto Sub in exchange for their services
related to the Transaction, and the remaining shares were retired in June 2017.

Share
Exchange

On
June 7, 2017, the Company, entered into a Share Exchange Agreement (the “Exchange Agreement”) with Michael Poutre,
in his sole capacity as representative for the shareholders of Crypto Sub, pursuant to which each issued and outstanding share
of common stock of Crypto Sub was exchanged for shares of common stock of the Company (the “Share Exchange”), resulting
in the aggregate issuance of 7,026,614 shares of common stock of the Company, on a pro-rata basis, as provided on the Exchange
Agreement, to the shareholders of Crypto Sub, in exchange for 727,867 shares of common stock of Crypto Sub.

20

The
Stock Sale, the Stock Dividend and the Share Exchange are collectively referred to as the “Acquisition”. Immediately
following the Acquisition, (i) Crypto Sub became a wholly owned subsidiary of the Company; (ii) all of the former shareholders
of Crypto Sub became shareholders of the Company, on a pro-rata basis; and (iii) the operations of the Company solely consisted
of the operations of Crypto Sub.

Proposed
Stock Split

On
December 12, 2017, the Company’s Board and a majority of its stockholders approved a forward split of the Company’s
Common Stock at a ratio of 10-for-1 (the “Stock Split”) such that each share of Common Stock issued and outstanding
as of December 12, 2017 shall, immediately following the effective time of the Stock Split, automatically be converted into and
exchanged for 10 shares of Common Stock. The Company filed a Definitive Information Statement on Schedule 14C with the SEC on
January 5, 2018. On January 12, 2018, the Company submitted an Issuer Company-Related Action Form to the Financial Industry Regulatory
Authority (“FINRA”) for approval of the Stock Split. On March 1, 2018, we received a letter from FINRA rejecting the
Stock Split on the basis of deficiency and in the interest of the protection of investors, the public interest and to maintain
fair and orderly markets. On March 8, 2018, the Company submitted an appeal to FINRA pursuant to FINRA Rule 6490, which was reviewed
by FINRA’s Uniform Practice Code Committee on April 27, 2018, and affirmed, in part, the deficiency determination. The Company
has a right to appeal this decision to the Securities and Exchange Commission, but it has not made a final determination as to
whether it will proceed with the appeal.

We
are subject to risks, expenses and uncertainties frequently encountered by companies in the cryptocurrency and digital asset market.
These risks include, but are not limited to, volatility and high speculation, developing regulations and unforeseeable risks which
we may not anticipate. We cannot be certain that any additional required financing will be available when needed or on terms which
are favorable to us. Our operations to date have been primarily funded through the sales of our securities. Various factors, including
our limited operating history with minimal revenues to date, have resulted in limited working capital available to fund our operations.
There are no assurances that we will be successful in securing additional financing in the future to fund our operations going
forward. Failure to generate sufficient cash flows from operations, raise additional capital or reduce certain discretionary spending
could have a material adverse effect on our ability to achieve our intended business objectives.

Results
of Operations

For
the three months ended March 31, 2018

Revenue

Cryptocurrency
Investment Segment

We
recorded revenue of $1,072,598 for the three months ended March 31, 2018, which was primarily from our net realized gains on sales
of cryptocurrencies. For the period from March 9, 2017 to March 31, 2017, the Company had only no revenues from investment in
cryptocurrencies as we had just begun operations.

Software
Subscription Segment

We
recorded software subscription revenue of $456,697 for the three months ended March 31, 2018, which was primarily from the acquired
CoinTracking business as of January 26, 2018. This segment had no revenues for the period from March 9, 2017 to March 31, 2017
as the segment was not acquired until January 26, 2018.

General
and administrative expenses

Cryptocurrency
Investment Segment

For
the three months ended March 31, 2018, we incurred an aggregate total of $1,439,020 of general and administrative expenses, which
primarily consisted of costs relating to professional fees, and payroll and payroll related expenses. Other operating expenses
of $708,139 represents an adjustment to offset the previously recorded stock compensation costs during 2017, as a result of a
decline of the estimated value of the Company’s common stock during the three months ended March 31, 2018. For the period
of March 9, 2017 to March 31, 2017 the operating expenses of $660,016 consisted primarily of $580,000 of stock compensation expense
and an additional $80,000 for professional services.

Professional
services included in the general and administrative expenses consisted primarily of contracting fees, consulting fees, accounting
fees, and legal costs. These fees are associated with our source code development, consulting and advising and educational developments.

21

Software
Subscription Segment

For
the three months ended March 31, 2018, we incurred $640,899 in general and administrative expenses, which primarily consisted
of costs relating to professional fees, and payroll and payroll related expenses from the acquired cointracking business on January
26, 2018. This segment had no operations for the period from March 9, 2017 to March 31, 2017.

Net
unrealized appreciation/depreciation on investment

Cryptocurrency
Investment Segment

We
recorded an unrealized depreciation of $2,427,468 on our investment in cryptocurrency for the three months ended March 31, 2018.
In addition to the unrealized loss/gains, we recognized realized gains on investment in cryptocurrency of $1,072,598 for the three
months ended March 31, 2017. For the period March 9, 2017 to March 31 2017 there was no unrealized/appreciation/depreciation due
to limited investments in cryptocurrencies and as the Company had just begun operation in this segment at this time.

Software
Subscription Segment

We
recorded an unrealized depreciation of $478,089 on our investment in cryptocurrency since the acquisition of CoinTracking, January
26, 2018 to March 31, 2018.

The
value of holdings depreciated for reasons such as the decline in values from prior over-speculation, the introduction of shorting
in the futures market, new social media advertising restrictions and increased global regulatory concerns.

Unrealized
and realized appreciation and depreciation of our holding in cryptocurrency are driven primarily by fluctuations in the market
prices of our holdings as well as the mix in the various cryptocurrency that comprises our portfolio.

Liquidity
and Capital Resources

For
the three months ended March 31, 2018

Liquidity
is our ability to generate sufficient cash flows from operating activities to meet our obligations and commitments. In addition,
liquidity includes the ability to obtain appropriate financing or to raise capital. We have funded our operations since inception
through the sale of our securities. We expect that our cash will be sufficient to fund our activities for the next twelve months,
however, we will continue to require funds to fully implement our plan of operation.

The
following table summarizes the primary sources and uses of cash for the periods presented below:

Three
months ended March 31, 2018

Net
cash used in operating activities

$

(2,031,654

)

Net
cash used in investing activities

(3,245,758

)

Net
cash provided by financing activities

70

Net
decrease in cash and cash equivalents

$

(5,277,342

)

Operating
Activities

We
have incurred, and expect to continue to incur, significant expenses in the areas of professional fees and contracting services.

Operating
activities used $2,031,654 for the three months ended March 31, 2018. The primary use of our cash was to fund general and administrative
expenses, which consisted of wages and professional fees, including consulting costs and legal fees in relation to the day-to-day
operations. Net cash used during the three months ended March 31, 2018 consisted of a net loss of $3,521,747 adjusted for net
change in unrealized depreciation on investment in cryptocurrency of $2,905,557, net realized gain on sales of cryptocurrency
of $1,072,598, customer payments received in cryptocurrency of $544,340, depreciation of $17,101, reversal of stock based compensation
expense of $708,139, accounts receivable of $62,954, prepaid expenses of $71,581, contract liabilities of $850,951, value-added
tax payable of $5,526 and accounts payable and accrued liabilities of $44,662.

22

Investing
Activities

Net
cash used in investing activities for the three months ended March 31, 2018 was primarily for an acquisition in CoinTracking,
of $4,736,400 which was offset by the $1,547,097 of cash acquired in the acquisition. We expect to continue to acquire majority
and minority ownership of strategic business partners in the normal course of our business. The amount and timing of these purchases
and the related cash outflows in future periods is difficult to predict and is dependent on a number of factors including, but
not limited to, any increase in the number of our employees and any developments in our operating plan.

Financing
Activities

Net
cash provided by financing activities for the three months ended March 31, 2018 was $70, which was the result of proceeds upon
an exercise of stock options.

Critical
Accounting Policies and Estimates

The
discussion and analysis of the financial condition and results of operations of the Company is based upon our condensed consolidated
financial statements, which have been prepared in conformity with accounting principles generally accepted in the United States
of America (“US GAAP”). Certain accounting policies and estimates are particularly important to the understanding
of our financial position and results of operations and require the application of significant judgment by our management or can
be materially affected by changes from period to period by economic factors or conditions that are outside of our control. As
a result, they are subject to an inherent degree of uncertainty. In applying these policies, management uses its judgment to determine
the appropriate assumptions to be used in the determination of certain estimates. Those estimates are based on our historical
operations, our future business plans and projected financial results, the terms of existing contracts, observance of trends in
the industry, information provided by our customers and information available from other outside sources, as appropriate.

Business
Segments

The
Company has two streams of principal revenue segments as of March 31, 2018:

Trading
Segment primarily consists of amounts earned through trading activities of cryptocurrencies. The Company records the realized
gain or loss on the investments on a trade date basis. The changes in unrealized appreciation or depreciation on the investments
are measured to market on the last day of every month at 11:59 p.m., Pacific Time, based on publicly available cryptocurrency
exchanges. The Company classifies investment in cryptocurrency as trading investments. Trading generally reflects active and frequent
buying and selling, and is generally used with the objective of generating profits on short-term difference in price.and costs
are operating expenses that consists of general and administrative costs in North America.

The
Company also has subscription revenues through its wholly-owned subsidiary CoinTracking, LLC and significantly minimal amounts
of consulting revenue. CoinTracking’s segment primarily consists of amounts earned through subscriptions to the CoinTracking
website. Operating expenses related to this segment are technology infrastructure and general administrative costs primarily incurring
in Germany.

Stock
Based Compensation

In
accordance with ASC No. 718, Compensation – Stock Compensation (“ASC 718”), the Company measures the compensation
costs of stock-based compensation arrangements based on the grant date fair value of granted instruments and recognizes the costs
in financial statements over the period during which employees are required to provide services. Stock-based compensation arrangements
include stock options.

Equity
instruments (“instruments”) issued to non-employees are recorded on the basis of the fair value of the instruments,
as required by ASC 718. ASC No. 505, Equity Based Payments to Non-Employees (“ASC 505”), defines the measurement date
and recognition period for such instruments. In general, the measurement date is (a) when a performance commitment, as defined,
is reached or (b) when the earlier of (i) the non-employee performance is complete and (ii) the instruments are vested. The compensation
cost is remeasured at fair value at each reporting period when the award vests. As a result, stock option-based payments to non-employees
can result in significant volatility in compensation expense.

23

The
Company accounts for its stock based compensation using the Black-Scholes model to estimate the fair value of stock option awards.
Using this model, fair value is calculated based on assumptions with respect to the (i) expected volatility of the Company’s
common stock price, (ii) expected life of the award, which for options is the period of time over which employees and non-employees
are expected to hold their options prior to exercise, and (iii) risk-free interest rate.

Fair
Value Measurements

The
Company recognizes and discloses the fair value of its assets and liabilities using a hierarchy that prioritizes the inputs to
valuation techniques used to measure fair value. The hierarchy gives the highest priority to valuations based upon unadjusted
quoted prices in active markets for identical assets or liabilities (Level 1 measurements) and the lowest priority to valuations
based upon unobservable inputs that are significant to the valuation (Level 3 measurements). Each level of input has different
levels of subjectivity and difficulty involved in determining fair value.

Level
1

Inputs
are unadjusted, quoted prices for identical assets or liabilities in active markets at the measurable date.

Level
2

Inputs,
other than quoted prices included in Level 1 that are observable for the asset or liability through corroboration with market
data at the measurement date.

Level
3

Unobservable
inputs that reflect management’s best estimate of what participants would use in pricing the asset or liability at the
measurement date.

The
carrying amounts of the Company’s financial assets and liabilities, including cash, accounts payable, and accrued liabilities
approximate fair value because of the short maturity of these instruments.

Revenue
Recognition

The
Company has two streams of principal revenue segments as of March 31, 2018. The Company records the realized gain or loss on the
investments on a trade date basis. The changes in unrealized appreciation or depreciation on the investments are measured to market
on the last day of every month at 11:59 p.m., Pacific Time, based on publicly available cryptocurrency exchanges. The Company
classifies investment in cryptocurrency as trading investments. Trading generally reflects active and frequent buying and selling,
and is generally used with the objective of generating profits on short-term difference in price.

The
Company also has subscription revenues through its subsidiary Coin Tracking LLC and significantly minimal amounts of consulting
revenue. In May 2014, the FASB issued ASU No. 2014-09, Revenue from Contracts with Customers. ASU No. 2014-09 supersedes nearly
all existing revenue recognition guidance under GAAP. The Company adopted ASU No. 2014-09 as of January 1, 2018 using the modified
retrospective transition method for contracts as of the date of initial application. There is no cumulative impact to the Company’s
retained earnings at January 1, 2018. See “Note 5 - Revenue Recognition” for additional information on the impact
to the Company.

Income
Taxes

Deferred
tax assets and liabilities are recognized for expected future consequences of events that have been included in the financial
statements or tax returns. Under the asset and liability method, deferred income tax assets and liabilities are determined based
on the differences between the financial reporting and tax bases of assets and liabilities and are measured using the currently
enacted tax rates and laws. A valuation allowance is provided for the amount of deferred tax assets that, based on available evidence,
are not expected to be realized. The provision for income taxes represents the tax payable for the period and the change during
the period in deferred tax assets and liabilities. The Income tax payable of $800 reflects the minimum franchise tax for the State
of California.

When
tax returns are filed, it is highly certain that some positions taken would be sustained upon examination by the taxing authorities,
while others are subject to uncertainty about the merits of the position taken or the amount of the position that would be ultimately
sustained. The benefit of a tax position is recognized in the financial statements in the period during which, based on all available
evidence, management believes it is more likely than not that the position will be sustained upon examination, including the resolution
of appeals or litigation processes, if any. Tax positions taken are not offset or aggregated with other positions. Tax positions
that meet the more-likely-than-not recognition threshold are measured as the largest amount of tax benefit that is more than 50
percent likely of being realized upon settlement with the applicable taxing authority. The portion of the benefits associated
with tax positions taken that exceeds the amount measured as described above is reflected as a liability for unrecognized tax
benefits along with any associated interest and penalties that would be payable to the taxing authorities upon examination.

24

Impairment
of long lived assets

The
Company analyzes its long-lived assets for potential impairment. Impairment losses are recorded on long-lived assets when indicators
of impairment are present and the undiscounted cash flows estimated to be generated by those assets are less than the net carrying
amount of the assets. In such cases, the carrying values of assets to be held and used are adjusted to their estimated fair value,
less estimated selling expenses. For the three months ended March 31, 2018, the Company recognized no impairment losses on its
long-lived assets.

Off-Balance
Sheet Transactions

We
do not have any off-balance sheet transactions.

Trends,
Events and Uncertainties

The
Company is subject to various risks including market risk, liquidity risk, and other risks related to its concentration in cryptocurrency.
Investing in cryptocurrency is currently unregulated, highly speculative, and volatile. The cryptocurrency and digital assets
market is, by its nature, unpredictable. Although we will undertake compliance efforts, including efforts with commercially reasonable
diligence, there can be no assurance that there will not be a new or unforeseen law, regulation or risk factor which will materially
impact our ability to continue our business as currently operated or raise additional capital to foster our continued growth.

The
prices of cryptocurrency could materially and adversely affect an investment in the shares of the Company. The prices of the cryptocurrencies
have a limited history. During such history, the cryptocurrencies’ prices have been volatile and subject to influence by
many factors including the levels of liquidity. If the cryptocurrency’s markets continue to experience significant price
fluctuations, the Company may experience losses. Several factors may affect the prices of the cryptocurrencies, including, but
not limited to, global cryptocurrency supply and demand, and competition from other forms of digital currency or payments services.

There
is currently no clearing house for cryptocurrency, nor is there a central or major depository for the custody of cryptocurrency.
There is a risk that some or all of the Company’s cryptocurrencies could be lost or stolen. The Company does not have insurance
protection on its cryptocurrency which exposes the Company and its shareholders to the risk of loss of the Company’s cryptocurrency.
Further, cryptocurrency transactions are irrevocable. Stolen or incorrectly transferred of cryptocurrency may be irretrievable.
As a result, any incorrectly executed cryptocurrency transactions could adversely affect an investment in the Company.

To
the extent private keys for the cryptocurrency’s addresses are lost, destroyed or otherwise compromised and no backup of
the private keys are accessible, the Company may be unable to access the cryptocurrency held in the associated address and the
private key will not be capable of being restored by the cryptocurrency network.

The
processes by which cryptocurrency transactions are settled are dependent on the cryptocurrency peer-to-peer network, and as such,
the Company is subject to operational risk. A risk also exists with respect to previously unknown technical vulnerabilities, which
may adversely affect the value of the cryptocurrencies.

Other
than as discussed above and elsewhere in this Quarterly Report or in our Annual Report on Form 10-K for the period from Inception
through December 31, 2017, filed with the Securities and Exchange Commission on April 2, 2018, we are not aware of any trends,
events or uncertainties that are likely to have a material effect on our financial condition.

ITEM
3. Quantitative and Qualitative Disclosures About Market Risk.

As
a “smaller reporting company” as defined by Item 10 of Regulation S-K, the Company is not required to provide information
required by this Item.

25

ITEM
4. Controls and Procedures.

Evaluation
of Disclosure Controls and Procedures

We
maintain disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act) that are designed
to ensure that information required to be disclosed in our reports filed under the Exchange Act, is recorded, processed, summarized
and reported within the time periods specified in the Securities and Exchange Commission’s rules and forms, and that such
information is accumulated and communicated to our management, including our principal executive officer and principal financial
and accounting officer, as appropriate, to allow timely decisions regarding required disclosure.

We
carried out an evaluation under the supervision and with the participation of management, including our principal executive officer
and principal financial and accounting officer, of the effectiveness of the design and operation of our disclosure controls and
procedures as of March 31, 2018, the end of the period covered by this Quarterly Report. Based upon the evaluation of our disclosure
controls and procedures as of March 31, 2018, our Chief Executive Officer (principal executive officer) and Chief Financial Officer
(principal financial and accounting officer) concluded that, as of such date, management identified certain deficiencies that
were determined to be material weaknesses.

A
material weakness is a deficiency, or a combination of deficiencies, in disclosure controls and procedures, such that there is
a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be
prevented or detected on a timely basis. Because of the material weaknesses described below, management concluded that our disclosure
controls and procedures were ineffective as of end of the period covered by this report to ensure that information required to
be disclosed by us in the reports we file or submit under the Exchange Act is recorded, processed, summarized, and reported within
the time periods specified in the SEC’s rules.

The
specific material weaknesses identified by the Company’s management as of end of the period covered by this report include
the following:

●

we
have not performed a risk assessment and mapped our processes to control objectives;

●

we
have not implemented comprehensive entity-level internal controls;

●

we
have not implemented adequate system and manual controls; and

●

we
do not have sufficient segregation of duties.

Despite
the material weaknesses reported above, our management believes that our financial statements included in this report fairly present
in all material respects our financial condition, results of operations and cash flows for the periods presented and that this
report does not contain any untrue statement of a material fact or omit to state a material fact necessary to make the statements,
in light of the circumstances under which such statements were made, not misleading with respect to the period covered by this
report. In an effort to remedy any material deficiencies, management intends to segregate duties and controls among different
officers and other key employees, whereby each officer is expected to have distinct responsibilities implementing checks and balances
over the control of assets to protect the Company against any possibility of misstatement.

Assessment
of Internal Control over Financial Reporting

Our
management assessed the effectiveness of our internal control over financial reporting as of March 31, 2018. In making this assessment,
management used the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”)
in Internal Control - Integrated Framework (2013). Based on management’s assessment, management concluded that the above
material weaknesses have not been remediated and, accordingly, our internal control over financial reporting was not effective
as of March 31, 2018.

Changes
in Internal Control over Financial Reporting

No
changes in the Company’s internal control over financial reporting have come to management’s attention during the
Company’s last fiscal quarter that have materially affected, or are likely to materially affect, the Company’s internal
control over financial reporting.

26

PART
II-OTHER INFORMATION

ITEM
1. Legal Proceedings.

On
December 21, 2017, a class action complaint was filed in the United States District Court, Central District of California, by
Monika Shepherdson, individually and on behalf of all others similarly situated, as the plaintiff, against the Company, Michael
Poutre and Ivan Ivankovich, as the defendants, alleging violation of Section 10(b) of the Exchange Act and Rule 10b-5 in the form
of false or misleading statements or omissions and a scheme to manipulate the price of the Company’s common stock. (Case
No. 2:17-cv-09157-CAS-FFM). On February 15, 2018, the Shepherdson Matter was voluntarily dismissed in its entirety by the
plaintiff, without any payment by the Company, in exchange for an agreement by the Company to forego seeking sanctions against
plaintiff and her counsel for the filing of a frivolous lawsuit.

On
February 20, 2018, a motion was filed by Paul Van Loon and Hassan Yahfoufi for appointment as lead plaintiffs and approval of
selection of lead counsel on the Shepherdson Matter pursuant to the Private Securities Litigation Reform Act. On February 27,
2018, counsel for Monika Shepherdson filed a Letter with the court stating that “Ms. Shepherdson no longer wishes to pursue
the claims against the Defendants set forth in her complaint.” On February 28, 2018, the Court denied the motion and upheld
the dismissal.

On
January 24, 2018, a verified shareholder derivative complaint was filed in the United States District Court, Central District
of California, by Sylvain Hamel, on behalf of The Crypto Company, as the plaintiff, against Michael Poutre, James Gilbert and
Anthony Strickland, containing the same factual allegations as the Shepherdson Matter and alleging, among other things, claims
for breach of fiduciary duty as directors and/or officers of the Company. (Case No. l 8-cv-00616). On March 5, 2018, the
action was voluntarily dismissed in its entirety by the plaintiff, without any payment by the Company.

On
February 7, 2018, a verified shareholder derivative complaint was filed in the United States District Court, Central District
of California, by Michel Blais, on behalf of The Crypto Company, as the plaintiff, against Michael Poutre, Ivan Ivankovich, James
Gilbert and Anthony Strickland, also based upon the same factual allegations as the Shepherdson Matter and alleging similar claims
for breach of fiduciary duty as directors and/or officers of the Company. (Case No. l 8-cv-01072). On March 2, 2018, the
action was voluntarily dismissed in its entirety by the plaintiff, without any payment by the Company.

Item
1A. Risk Factors.

Reference is made to
our Annual Report on Form 10-K for the period from March 9, 2017 (“Inception”), through December 31, 2017, filed with
the Securities and Exchange Commission on April 2, 2018. At the time of this filing, there have been no material changes to our
risk factors that were included in our 2017 Annual Report other than as described below.

Risks Related to Blockchain Technologies
and Digital AssetsThe Company is subject to various risks including market risk, liquidity risk, and other risks related
to its investments in Digital Assets, such as cryptocurrencies. Investing in Digital Assets is currently unregulated, highly speculative,
and volatile.

The prices of cryptocurrency
could materially and adversely affect an investment in the shares of the Company. The prices of the cryptocurrencies have a limited
history. During such history, the cryptocurrencies’ prices have been volatile and subject to influence by many factors including
the levels of liquidity. If the cryptocurrency’s markets continue to experience significant price fluctuations, the Company
may experience losses. Several factors may affect the prices of the cryptocurrencies, including, but not limited to, global cryptocurrency
supply and demand, and competition from other forms of digital currency or payments services.

There is currently
no clearing house for cryptocurrency, nor is there a central or major depository for the custody of cryptocurrency. There is a
risk that some or all of the Company’s cryptocurrencies could be lost or stolen. The Company does not have insurance protection
on its cryptocurrency which exposes the Company and its shareholders to the risk of loss of the Company’s cryptocurrency.
Further, cryptocurrency transactions are irrevocable. Stolen or incorrectly transferred of cryptocurrency may be irretrievable.
As a result, any incorrectly executed cryptocurrency transactions could adversely affect an investment in the Company.

To the extent private
keys for the cryptocurrency’s addresses are lost, destroyed or otherwise compromised and no backup of the private keys are
accessible, the Company may be unable to access the cryptocurrency held in the associated address and the private key will not
be capable of being restored by the cryptocurrency network.

The processes by which
cryptocurrency transactions are settled are dependent on the cryptocurrency peer-to-peer network, and as such, the Company is
subject to operational risk. A risk also exists with respect to previously unknown technical vulnerabilities, which may adversely
affect the value of the cryptocurrencies.

27

ITEM
2. Unregistered Sales of Equity Securities and Use Of Proceeds.

Unregistered
Sales of Securities

On
January 3, 2018, the Company issued a stock option to purchase 25,000 shares of its common stock in payment of fees to one of
its professional service providers. 12,500 shares vest six months from the grant date, 6,250 shares vest 12 months from the grant
date and the remaining 6,250 shares vest 18 months from the grant date. The option will expire on January 3, 2028 and the exercise
price of the stock option was established on the grant date at $7.00 per share.

On
January 16, 2018, pursuant to an Equity Purchase Agreement (the “Agreement”) entered into on December 22, 2017 by
and among the Company, CoinTracking, LLC, a Nevada limited liability company and wholly-owned subsidiary of the Company (“CoinTracking”),
Kachel Holding GmbH, an entity formed under the laws of the Republic of Germany (“Kachel Holding”), and Dario Kachel,
an individual, CoinTracking purchased from Kachel Holding 12,525 shares of CoinTracking GmbH, an entity formed under the laws
of Germany (“CoinTracking GmbH”), representing 50.1% of the equity interests in CoinTracking GmbH, for a purchase
price which consisted, in part, of 473,640 shares of common stock of the Company (the “CoinTracking Acquisition”).
The transaction closed on January 26, 2018 (see Note 4).

On January 19, 2018,
the Company issued a stock option to purchase 25,000 shares of its common stock in payment of fees to one of its professional
service providers. 12,500 shares vest six months from the grant date, 6,250 shares vest 12 months from the grant date and the
remaining 6,250 shares vest 18 months from the grant date. The option will expire on January 19, 2028 and the exercise price of
the stock option was established on the grant date at $10.00 per share.

On January 19, 2018,
the Company issued a stock option to purchase 75,000 shares of its common stock in payment of fees to one of its professional
service providers. 27,500 shares vest three months from the grant date and the remaining 37,500 shares vest six months from the
grant date. The option will expire on [January 19, 2028] and the exercise price of the stock option was established on the grant
date at $7.00 per share.

On March 14, 2018,
the Company issued a stock option to purchase 25,000 shares of its common stock in payment of fees to one of its professional
service providers. 12,500 shares vest six months from the grant date, 6,250 shares vest 12 months from the grant date and the
remaining 6,250 shares vest 18 months from the grant date. The option will expire on March 14, 2028 and the exercise price of
the stock option was established on the grant date at $10.00 per share.

The shares issued above
were issued in transactions that were exempt from the registration requirements of the Securities Act of 1933, as amended (the
“Securities Act”), pursuant to Section 4(a)(2) of the Securities Act inasmuch as the securities were offered and sold
solely to sophisticated investors and the Company did not engage in any form of general solicitation or general advertising in
making the offering.

Item
3. Defaults Upon Senior Securities.

Not
applicable.

Item
4. Mine Safety Disclosures.

Not
applicable.

28

Item
5. Other Information.

On
April 3, 2018, CoinTracking, LLC, a Nevada limited liability company and a wholly-owned subsidiary of the Company (“Borrower”),
entered into a Loan Agreement (the “Loan Agreement”) with CoinTracking GmbH, a private limited liabilty company organized
under the laws of the Federal Republic of Germany (“Lender”), pursuant to which Lender may provide a loan (the “CoinTracking
Loan”) of up to $3,000,000 to Borrower, to be advanced to Borrower in one or more tranches, at such times and in such amounts
as may be requested by Borrower from time to time, on or before the tenth anniversary of the Loan Agreement. The Company is deemed
obligor of Borrower’s obligations under the Loan Agreement for United States Federal income tax purposes. Interest on the
CoinTracking Loan will accrue at a rate per annum of the greater of (i) three percent (3%), or (ii) the interest rates published
monthly by the United States Internal Revenue Service and in effect under section 1274(d) of the Internal Revenue Code in effect
as of the date of issuance of any promissory note under the CoinTracking Loan, and will be payable quarterly. On April 3, 2018,
pursuant to the Loan Agreement, Lender advanced $1,000,000 to Borrower in exchange for a promissory note (the “CoinTracking
Note”) of equal principal amount. The CoinTracking Note will mature on the second anniversary thereof. The Borrower and
Lender are consolidating entities, as such, the loan and advances are considered to be intercompany transactions and will be eliminated
in consolidation.

Effective
as of April 17, 2018, Jeffrey Berman and Holly Ruxin were appointed directors of the Company, each for a term of six months from
the effective date of appointment or until his or her earlier death, resignation or removal. The Company entered into a Director
Services Agreement with each of Mr. Berman and Ms. Ruxin, pursuant to which each of Mr. Berman and Ms. Ruxin will be entitled
to receive (i) a fee of $80,000 per annum, payable quarterly, and (ii) a ten-year option to purchase 100,000 shares of common
stock of the Company at an exercise price of $10.00 per share, which option shall be fully vested on the six-month anniversary
of the date of grant.

Effective
as of April 18, 2018, Anthony Strickland, Jeffrey Berman, and Holly Ruxin were appointed to the Audit Committee and Compensation
Committee, with Ms. Ruxin serving as Chairperson of the Audit Committee and Mr. Strickland Serving as Chairperson of the Compensation
Committee.

On
April 18, 2018, the Company issued to James Gilbert 202,512 shares of common stock of the Company, immediately vested, for certain
services performed on behalf of the Company.

Effective
May 14, 2018, Michael Poutre, former Chief Executive Officer and a director of the Company, resigned from all of his current roles
with the Company effective immediately. Mr. Poutre will remain as a consultant to the Company until November 2018. In connection
with Mr. Poutre’s resignation from the Company, the Company entered into a Separation and Consulting Agreement and General
Mutual Release (the “Separation and Consulting Agreement”), which was executed on May 9, 2018 and approved by the
Board of Directors on May 14, 2018. The Separation and Consulting Agreement was not effective until May 17, 2018, following the
end of the revocation period.

The
Separation and Consulting Agreement provides that the Company will pay Mr. Poutre a lump-sum cash payment of (i) his earned but
unpaid base salary, (ii) his accrued but unpaid vacation time, and (iii) any outstanding requests for expense reimbursements that
are approved pursuant to Company policy. Mr. Poutre will serve as a consultant of the Company for six months at a rate of $30,000
per month, payable in two separate tranches, though the Company may terminate his services for any reason. The Separation and
Consulting Agreement contains other standard provisions contained in agreements of this nature including non-disparagement and
a general release of any and all claims.

Effective
May 14, 2018, James Gilbert, the President of the Company, was appointed Chairman of the Company’s Board of Directors and
Chief Executive Officer. The Company did not enter into any new employment agreements with Mr. Gilbert, and Mr. Gilbert has no
family relationship with any director or executive officer of the Company.

+
This document is deemed not filed for purposes of Section 18 of the Exchange Act, or otherwise subject to the liability of that
section, nor shall it be deemed incorporated by reference into any filing under the Securities Act or the Exchange Act.

30

SIGNATURES

Pursuant
to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf
by the undersigned thereunto duly authorized.